Prime-Time for Super-Prime


Super-prime sales resilient in 2020 due to domestic demand and the search for space. Global super-prime sales fell only marginally in 2020 despite temporary property market shutdowns and the prevalence of travel restrictions.

The number of super-prime (US$10m+) transactions fell 1% in 2020 compared to a year earlier as market shutdowns and travel restrictions were offset by greater demand from domestic buyers reassessing their property needs. Volumes, or total spend, declined 5%.

Super-prime markets are often dominated by international buyers, so a largely flat market for the year demonstrates the scope to which the pandemic has caused domestic buyers to reassess their needs, often seeking out larger properties or homes closer to large, open spaces.

It is also a reminder that the world’s population of ultra-high-net worth individuals (UHNWIs) swelled during the year as huge fiscal stimulus and rock-bottom rates fuelled asset prices. A fifth of UHNWIs purchased a home in 2020, according to our Attitudes Survey in The Wealth Report 2021, which quizzed more than 600 private bankers, wealth advisors and family offices across 50 countries and territories.

There was significant variation in performance depending on the location and characteristics of cities. Sales rose in nine of the 12 markets we track with buyers spending US$18.9 billion across 1,066 sales.

London took the title of largest super-prime market, with US$3.7 billion transacted across 201 sales. Out of the usual top markets, the UK capital saw transactions rise by 3%, while Hong Kong and New York saw theirs fall by 27% and 48% respectively.

Domestic buyers accounted for a third of all activity in London’s £10m+ market, up from 12% a year earlier. European buyers were also more prevalent due to the relative ease with which they could reach the city.

The US real estate market is typically slow leading up to a presidential election year. In addition, New York City was one of the hardest hit major global cities in the earlier stages of the pandemic, in terms of Covid cases, and real estate showings were prohibited between March and July.

Despite the drop in sales transactions, the average sale price was up 5% year-over-year, indicating that purchasers were looking towards the higher end of the market, seeking larger homes. The overall market gained momentum post-election, continuing through the early months of 2021. Particularly, the super-prime market realised a 60% increase in sales compared to the same period in 2020. Much of that activity came from domestic buyers.

Globally the average super-prime sale stood at $17.7m for 2020, 4% below the 2019 average. However, some markets outperformed.

Geneva, at $20.1m, saw the highest average super-prime price across all markets, up 13% compared to the previous year. It was a strong year for the Swiss city across the board, with super prime sales rising 76% to 37 transactions.

The global ultra-prime (US$25m+) market was less active. Sales fell by 13% to 139 transactions in 2020, representing US$5.6 billion in sales.



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